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Europe woes dent GM's Q3 net
Source: Agencies |
November 10, 2011, Thursday
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Print Edition
Print Edition
EUROPE'S economic woes are weighing on General Motors Co's profits.
The company's third-quarter net income fell 15 percent from a year earlier, dragged down by losses in Europe and South America and weak earnings in all areas except North America and China.
GM yesterday said that its net income fell to US$1.7 billion in the quarter, or US$1.03 per share, compared with US$2 billion, or US$1.20 per share, a year earlier. Still, it was the GM's seventh-straight quarterly profit, and the lower numbers still beat Wall Street's expectations.
Analysts polled by FactSet predicted earnings of 94 cents per share.
Revenue rose 7.6 percent to US$36.7 billion. Analysts had expected US$35.9 billion.
GM posted a pretax loss of US$292 million in Europe as the economy struggled. Its profit rose slightly in North America to US$2.2 billion, but earnings at its international operations, including China, fell 29 percent to US$365 million. South American operations also swung to a loss of US$44 million for the quarter.
Chief Financial Officer Dan Ammann said the company had a solid quarter but needs to improve its margin of profit in all regions.
In Europe, Ammann said the company has made significant progress and is more than US$1 billion ahead of last year's pretax earnings. But it still needs to cut costs across the board and put out the right products that people will buy, Ammann said.
"There's no one silver bullet," he said.
GM said it would not break even in Europe this year because of deteriorating economic conditions there.
Ammann said the company has an aging car and truck portfolio in South America and is in the process of refreshing it. It also offered buyouts to employees that resulted in a 4 percent cut in the work force there, he said.
The company's third-quarter net income fell 15 percent from a year earlier, dragged down by losses in Europe and South America and weak earnings in all areas except North America and China.
GM yesterday said that its net income fell to US$1.7 billion in the quarter, or US$1.03 per share, compared with US$2 billion, or US$1.20 per share, a year earlier. Still, it was the GM's seventh-straight quarterly profit, and the lower numbers still beat Wall Street's expectations.
Analysts polled by FactSet predicted earnings of 94 cents per share.
Revenue rose 7.6 percent to US$36.7 billion. Analysts had expected US$35.9 billion.
GM posted a pretax loss of US$292 million in Europe as the economy struggled. Its profit rose slightly in North America to US$2.2 billion, but earnings at its international operations, including China, fell 29 percent to US$365 million. South American operations also swung to a loss of US$44 million for the quarter.
Chief Financial Officer Dan Ammann said the company had a solid quarter but needs to improve its margin of profit in all regions.
In Europe, Ammann said the company has made significant progress and is more than US$1 billion ahead of last year's pretax earnings. But it still needs to cut costs across the board and put out the right products that people will buy, Ammann said.
"There's no one silver bullet," he said.
GM said it would not break even in Europe this year because of deteriorating economic conditions there.
Ammann said the company has an aging car and truck portfolio in South America and is in the process of refreshing it. It also offered buyouts to employees that resulted in a 4 percent cut in the work force there, he said.
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